Sname 19 September

2015 Impact to marine fuels

Lefteris Capatos

ECA = Emission Control Area

Hong Kong 0,5-0,05%?

ECA Limit

1st July 2010

1% Sulphur

Max

2009 2010 2011 2012 2013 2015 2016 2017 2018 2014 2020 2021 2022 2023 2019 2024 2025

EU Ports & Californian Coast

1st Jan 2010

0.1% Sulphur Max

Global Limit

1st Jan 2012

3.5% Sulphur Max

ECA Limit

1st Jan 2015

0.1% Sulphur Max

Global Limit

1st Jan 2020 OR 1st Jan 2025

0.5% Sulphur Max

Subject to 2018 Feasibility

Study

New ECA

1st August 2012

Coastal USA & Canada ECA = Emission Control Area

Demand for 0,1% Sulphur max. will be met mainly by the use of middle distillate fuels (Low Sulphur MGO/MDO) Other solutions : -Use of SOx scrubbing technology -HFO can respect 0,1% S such as Exxon mobile ECA 50 but have still a very limited availability

0

50

100

150

200

250

300

350

400

450

500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Residual Max 1.5% Residual Max 1.0% Residual Max 4.5% Residual max 3.5%

Distillate Max 0.1% Distillate Max 0.5% Distillate - Other

ECA 1% S

2010

Global 3.5% S 2012

ECA 0.1% S

2015

Global 0.5% S

2020-2025

Global 4,5% S

SECA 1.5% S

Projected Bunker Demand according to applied regulations

Impact of new 2015 legislations

HFO consequences: • Higher demand for middle distillates fuels (Low Sulphur MGO/MDO) will further deteriorate

provided HFO due to severer conversion methods required to meet additional market demands (deteriorated ignition + combustion + fuel stability properties)

• Fuel change over from Jan 2015 being between HFO and middle distillate L.S. MGO/MDO is a higher risk to compatibility

• Souring HFO prices dictate slow steaming operation further challenges the ignition and combustion

• Use of middle distillate fuel within ECA results to prolonged storage times of HFO challenging its stability

LS MGO/MDO • M/E operation with middle distillate L.S. MGO/MDO will require additional storage space for

sufficient ship range within ECA regions. Change of tank allocation will require costly cleaning procedures

• Middle distillate L.S. MGO/MDO expected increased use is associated with proportionally increased risk for poor lubricity issues.

• Prolonged storage of middle distillate L.S. MGO/MDO does increase the risk for fuel destabilization.

Interest for more light fraction products, not in residual fuel oil = deeper conversion!

Source BP statistical research

Fuel Ignition + combustion

Most common methods for measuring ignition and combustion

CCAI=Calculated Carbon Aromatic index CII= Calculated Ignition Index

D=density at 15C V=viscosity (cst) t= viscosity temperature C

Combustion Pressure Trace

0.0

2.0

4.0

6.0

8.0

10.0

0 5 10 15 20 25

Time (msec)

Pre

ssure

incre

ase

(bar)

"Normal fuel" , ECN = 29 ECN = 13 ECN = 8

“good” fuel?

“problem” fuel?Ignition delay

Rate of Heat Release - ROHR

0.0

1.0

2.0

3.0

4.0

5.0

0 5 10 15 20 25

Time (msec)R

OH

R (

ba

r/m

se

c)

"Normal fuel" , ECN = 29 ECN = 13 ECN = 8

Long combustion period

Efficient combustion

FIA/FCA Fuel ignition/combustion analysis

Organic Combustion Improvers

• Improve spray pattern exposing more fuel to charge air (improve atomization) • Release free radicals for more vapor production (influence earlier ignition) • Reduce droplet size (less mass) allowing faster heat up and earlier ignition • Smaller coke particles require less time for complete burn through

Effect of Fe has been extensively evaluated in several studies. Oxidation of Carbon Particulates during combustion is 16 times faster with Fe

catalysts

Fe catalysts reduce the ignition temperature of Carbon by approximately 125ºC.

Carbon

particle

Iron oxide Iron oxide

Iron oxide

2+

2 Fe2O3 + 3C 4 Fe + 3 CO2

FeO + C Fe + CO

Parameter Description Unit Basefuel

Repeatability (r)

+/-

Basefuel

with

Octamar™

F35

ECN Estimated Cetane Number - 13.3 N/A 16

ID Ignition Delay msec 6.74 0.13338 6.29

MCD Main Combustion Delay msec 8.54 0.19574 7.90

EMC End of Main Combustion msec 17.28 0.57508 14.58

EC End of Combustion msec 26.74 1.16480 22.82

PCP Pre Combustion Period msec 1.80 0.13271 1.61

MCP Main Combustion Period msec 8.73 0.54353 6.68

ABP After Burning Period msec 9.47 0.95310 8.24

maxROHR Maximum Rate of Heat Release bar/msec 1.35 0.11478 1.89

PMR Position of maxROHR msec 10.14 0.4593655 9.14

AR Accumulated ROHR - 7.54 0.92280 7.89

KEY Positive Response - Outside r

No Response - Within r

Response in FIA/FCA Test (IP541) – Example of Combined Fe catalyst

+ organic combustion improver (ignition + combustion) Pressure Trace

Time

Bar

MCP

PCP

Max PI

0.9 Max PI

0.01 Max PI

ID

MCD

0.1 Max PI

EMC ABP

EC

ABP = After Burning Period

EC = End of Combustion

EMC = End of Main Combustion

ID = Ignition Delay

Max PI = Max Pressure Increase

MCD = Main Combustion Delay

PCP = Pre Combustion Period

Rate Of Heat Release - ROHR

Time

Bar/

ms

Max R

OH

R

AR

PMR

EC

AR = Accumulated ROHR

EC = End of Combustion

Max RV = Max ROHR Value

MRT = Max ROHR Time

Improved ignition & combustion properties lead to less deposits = improved efficiency & reliability

Preservation of efficiency between maintenance intervals (Field Experience Example – Indonesian Power Station) Reduced deposit formation especially of Turbocharger / nozzle ring preserves efficiency overtime.

2,341 Hours

2.07%

Engine No 1 Engine No 2 (additised)

• Deterioration of efficiency in non additised engine equates to 2.07% over 2,341 hours.

• Test on 2x Warstila 9 TM620 engines

Source Cimac

Fuel cost is a major operational cost and cuurent trend is that fuel prices may further increase.

8

2 DAY-TO-DAY RUNNING COSTS OF THE VARIOUS VESSEL TYPES

Figure 2.1 gives the relative distribution of the day-to-day running costs by vessel type

of vessels operating between Finland and other countries and sailing under the Finnish

or a foreign1 flag, according to the Finnish Vessel Costs Survey 2006. Cost factors are

proportionately tied to vessel type and size. Seven vessel types are examined: container,

container feeder2, conventional dry cargo, dry bulk and ro-ro vessels, car and passenger

ferries and tankers. The comparisons given here were made by vessel type according to

the mean value for their draught categories3. It will be seen from the diagram that fuel

costs account for the largest share of the vessel costs for all vessel types now, and espe-

cially container vessels (fuel prices as at 2006: container vessels 54%, conventional dry

cargo vessels 38%, dry bulk vessels 40%, tankers 33 %, ro-ro vessels 36%, and car and

passenger ferries 30%)4.

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

100 %

Container Conventional dry

cargo

Dry bulk Tankers Ro-ro Car and passenger

ferries

Fuel

Overhead

Insurance

Repairs and maintenance

Crew (navigation)

Capital expenditure

Figure 2.1. Distribution of costs by vessel type on average for vessels operating between Finland and other countries and sailing under the Finnish or a foreign flag (Karvonen et al 2006).

1 The structure of day-to-day running costs of foreign vessels is assessed in the survey (Karvonen et al

2006) with principle reference to the main flag states for vessels entering Finnish ports. 2 A typical container vessel for feeder traffic in operation in Finnish waters (draught 9 m, container capac-

ity approximately 1,000 TEU). 3 Because the claculations do not use a weighted mean value, the figures do not reflect an average vessel

but the mean values for draught categories. 4 With regard to cointainer vessels, it should be noted that the calculation is based on sample data, includ-

ing that for large container vessels that do not enter Finnish ports. The share of fuel costs is not so great

for feeder container vessels typically sailing in Finnish waters. It is closer to those for conventional dry

cargo vessels.

Easiest and most popular measure for reducing the vessel fuel cost is via reducing vessel speed /engine load

According to Tests carried out by Maersk Line

• Reduce vessel speed by 20% (60% engine load) results in Fuel Consumption and CO2 emissions reduction of 10%.

• Reduce vessel speed by 50% (10% engine load) results in fuel consumption and CO2 emissions reduction of 30%.

Emma Maersk: Slow steaming can save 4000 ton of fuel on a one way voyage from Europe to Singapore. This with today’s HFO price is around 2,4$ million saving!

Studies have linked CO2 emissions to HFO consumption at a rate of 1: 3.1144 meaning that for each consumed ton of fuel 3,1144 tons of CO2 are emitted!

Slow steaming with poor ignition + combustion fuels

• Reduced efficiency of turbocharger and increased deposit formation (Low exhaust flow means inability to maintain sufficient boost pressure)

• Poor combustion leading to deposits on pistons, cylinder heads, valves, injectors, scavenge spaces etc.

• Exhaust gas economiser Low exhaust flow and poor combustion leading to increased depositing. Can result in uptake fire.

• Risk of cold corrosion in combustion chamber and exhaust gas system Lower exhaust gas temperatures at low load.

0,8

0,85

0,9

0,95

1

1,05

0 0,5 1 1,5 2 2,5 3

Various Solutions to slow steaming side effects

Slow steaming side effects mostly orientate from T/C poor efficiency!

• Sequential turbocharging

• Variable pitch turbines and nozzle rings

• Turbocharger cut-out

• Cylinder cut-out

Combustion improver / catalysts

• To enhance fuel ignition (critical for slow steaming)

• To enhance fuel droplet oxidation

• To maintain T/C optimum efficiency (deposit free)

0,94

0,95

0,96

0,97

0,98

0,99

1

1,01

0 0,5 1 1,5 2 2,5

Source - MAN Diesel T/C efficiency vs deposits

S.F.C. reductions are obtained by releasing more energy from every droplet of fuel

SFOC (g/kWhr)

Engine Load

TC Cutout? No Additive With Octamar™

F35C

Diff % *Daily Saving

47% No 182.13 180.27 1.02% $681

41% Yes 170.73 168.88 1.67% $1055

SFOC Case Study – European Container Line

* Daily saving includes additive cost

11,000 TEU vessel – MAN B&W 12K98ME-C Mk7 – 72,240kW Approach to measuring SFOC on a ship

Many short 6 hour test runs, alternating between additive use and not to build large data set All testing completed where steady operation can be maintained for whole test period One fuel in constant use for whole test

Fundamentally calculated by accurate recording of: Engine Power Volumetric fuel flow converted to Mass via Volume Correction Factor

SFOC Results Conducted by Caterpillar Motoren - Kiel

Innospec Fuel additive F35

6M43C HFO-Betrieb

Motorleistung / Engine Power - Load 50% 25%

be g/kWh 192.8 214

be g/kWh mit Additiv 189.7 206.8

%-Satz 98.39 96.64

% Improvement 1.61 3.36

• In response to their client request, Caterpillar Motoren (MaK) tested Octamar F35 on their engine test bed, under reduced load

operating conditions.

Summary : Combustion additive advantages to severely converted residual fuels burned under slow steaming operation

Fuel ignition

• Optimize fuel spray pattern (reduce droplet mass – increase fuel surface)

• Faster carbon oxidation with Fe combustion catalysts ( reduce fuel ignition temp) critical for engines under slow steaming

Fuel combustion

• Provide more time for complete combustion

• Complete burn out of fuel / Utilize all carbon into energy – not deposits = Specific fuel consumption reduction

Deposit reduction

• Preserve engine efficiency between scheduled maintenances and reduce SFC by keeping deposit free:

• Piston crowns, rings, injector nozzles and valves

• Economiser

• Turbocharger – Nozzle Ring and blades

Fuel stability/compatibility challenges

Analysis:

No1: Very good

compatibility

No2: Good compatibility

No3: Limited

compatibility

No4: Incompatibility

No5: Incompatibility

HFO HS Tank

95°C

Mixing

Column

100% HFO HS

100% HFO LS

HFO LS Tank

95°C

HFO HS & HFO LS Compatibility During Changeover

Changeover from one HFO to another is low risk, as can be done quickly and aromaticity of the fuel is similar

HFO Day Tank

95°C

Mixing

Column

100% HFO

100% MGO

LS MGO Tank

20°C

HFO & MGO more severe compatibility issues during changeover

Change over takes time: At 2C per minute this scenario will take almost 40 minutes

Quicker change over may cause fuel pump thermal shock, or “gassing up” in changeover column.

Changeover to MGO is high risk, as it takes a significant time to safely changeover. Plus MGO is very paraffinic and will effectively cause asphaltenes to flocculate

Solution: Dispersant / Stabiliser additive

Function of a Stabiliser:

Simulate natural resins that have been removed by secondary refining which keep the asphaltenes emulsified.

Function of a Dispersant:

Re-emulsify the existing agglomerations - clean up effect, make good fuel from sludge.

How to increase HFO stability = Keep asphaltenes apart

Structure of original colloids

Asphaltenes

Resins

Saturated

Aromatics

Flocculation and deposits due to large agglomerates

Changes in the surrounding medium

Legend

Hypothetic Model of Colloidal from Crude Oil

Structure of original colloids

Asphaltenes

Resins

Saturated

Aromatics Asphaltene kept in suspension by the help of dispersant

Changes in the surrounding medium

Legend

Addition of Treatment

Dispersant

Hypothetic Model of Colloidal from Crude Oil

Common methods to measure HFO stability & compatibility

-Spot test (compatibility)

-P-value test (reserve stability)

Hot Filter tests (Max: 0.10% m/m )

-TSE (total sediment existent) No fuel preparation

-TSP (total sediment potential) Fuel is heated to 100c for 24hours

-TSA (total sediment accelerated) Fuel is mixed with 10% cetane and heated

for 1 hour at 100C

-Turbiscan or RSN (ASTM D7061-12), RSN = Reserve Stability Number RSN < 5: good stability reserve, pass

RSN >5, < 10: limited stability reserve, fuel oil may flocculate

SN > 10: unstable fuel oil, likely flocculation of asphaltenes

0 min 1 min 2 min 3 min 4 min 5 min 6 min

Without additive

0 min 60 min

With additive

Mixing of IFO 180 & MGO During Changeover

Changeover between IFO & MGO

Hot Filtration (TSP) Turbiscan (RSN)

Sample No Additive 50ppm

Octamar™

BT-25

No Additive 50ppm

Octamar™ BT-

25

HFO 1 0.03 - 0.50 -

70%HFO

30%MGO

0.13 0.03 10.63 0.60

HFO 2 0.03 - 10.2

70%HFO

30%MGO

0.18 0.04 11.2 0.50

Source Lintec

Innospec in correlation with Lintec have simulated fuel change over scenarios between various HFO grades and middle L.S distillates.

Mixing of IFO 380 & MGO During Changeover

Maintaining Residual fuel Stability for longer time periods

Vessels frequently travelling within ECA’s on middle distillate fuel will result to having the onboard HFO in storage for prolonged time intervals. Time and temperature lead to HFO destabilization ! Bellow is a long term storage stability simulation using ASTM D7061-12 standard test. We see that stabilizing additives are a highly effective way to keep HFO stable and ready for use when needed.

Stabilized HFO = reduce sludge production = cost saving

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

Pre Trial Sep-11 Oct-11 Nov-11 Dec-11 Feb-11

Slu

gd

e %

Month

Sludge % - 66%

Backflushes/Tonne - 82%

Purifier HR/Tonne - 36%

No

te -

Vessel

in

Dry

do

ck J

an

2011.

Middle East Shipping Company - VLCC Monthly Total

0.0000

0.5000

1.0000

1.5000

2.0000

Ma

r-0

8

Ap

r-0

8

Ma

y-0

8

Ju

n-0

8

Ju

l-0

8

Au

g-0

8

Se

p-0

8

Oct-

08

No

v-0

8

De

c-0

8

month

Slu

dg

e/F

ue

l x

10

0

Maersk Sealand Meteor 2008

Obtained sludge production reductions with dispersing / stabilizing additives range from -30% to over -60% depending on the initial sludge production tendency

All residual HFO under normal conditions produce a sludge % varying from 0,7 to 1,5% of the total fuel consumed. Assuming an average 1% sludge production = 6$* per every consumed ton is wasted + the handling costs *(Assuming 600$/Ton fuel price)

Un-Stabilized HFO creates more sludge load on purifiers Fuel System Catfine Removal

Source - DNVPS

60 mg/kg

Middle distillate fuel tank capacities are designed according to the auxiliary engines fuel consumption requirements. When used to feed main engine the vessels cruising range is reduced to around 3 days!

Source ABS

Typical ship fuel tank arrangements VS sea cruising range when using distillate fuel on M/E)

Need for increased LS MGO/MDO storage tanks

2015 ECA - Change of Fuel Tank Allocation

T1

T2 T3

T4 T5

ENGINE RM

C1

C2

C3

HFO Tank conditioning prior to final manual clean up

Summary HFO stability + Compatibility solutions 2015

• Reduced risk of incompatibility during changeovers between low sulphur middle distillate and HFO.

• Improved HFO stability for longer storage periods while vessel is travelling within ECA on middle distillate

• Can be used to clean tanks up prior to change of tank allocation or dry-dock cleaning.

• Less sludge = more fuel!= cost saving

• Keeps separators and centrifuges clean – reduces workload, maintenance requirements and maintains efficiency for optimum catfine removal.

(I) Boundary Lubrication (II) Elastohydrodynamic

(mixed) lubrication (III)Hydrodynamic lubrication

Stribeck curve

LS MGO/ MDO What is Lubricity?

Lubricity – “The intrinsic ability of a fluid to prevent wear on contacting metal surfaces”

Lubricity types

Fuel Pump Tribology

• Two distinct regimes of lubrication in a fuel pump.

– Hydro-dynamic lubrication – relates to the oil film between moving two metal surfaces, which prevents contact and therefore wear. This is affected by the oil’s viscosity.

– Boundary Lubrication (lubricity) – more critical in fuel pumps. Relates to lubrication where clearance is minimal, and moving metal surfaces are in contact. The fluid creates a mono molecular layer on the surface of the components to reduce friction and prevent wear.

Low Lubricity – Causes & tests

• Cause of lubricity problems in diesel fuel – Hydroprocessing to reduce sulphur levels also removes

• N species • O species • Polyaromatic • Others

• Lubricity test methods

– High Frequency Reciprocating Rig (HFRR)* 60 °C – Scuffing Load Ball On Cylinder Lubricity Evaluator (SLBOCLE) – Ball On Three Discs (BOTD) – Bosch pump test

* HFRR (IP 450 conditions) • Temp of fuel: 60C • Load: 200gr • Stroke: 1000μm • Time: 75 minutes • Frequency: 50hz • Wear Scar Limit: 520μm

ISO8217:2010 includes a limit for lubricity in distillate fuels by the HFRR method ISO12156-1 = 520µm max WSD when sulfur content is < 0,05%

Upper specimen

Lower Specimen

MGO Lubricity Study

• In the aftermath of ISO8217:2010’s introduction there were some misconceptions regarding the relationship of lubricity to sulphur content and viscosity.

• Innospec Limited and Intertek Lintec Shipcare Service teamed up to

assess the lubricity characteristics of marine distillate fuels as per the above specification, and assess the relationship of lubricity to sulphur content and viscosity.

• Study began in October 2009 and concluded in July 2011. • 182 fuels tested & sourced globally. • The only selection criteria used was the tested sulphur content.

Overall Averages (182 Samples) WSD = 372 Viscosity = 2.93cSt Sulphur = 660ppm (0.066%)

7.2% of fuels failed specification (>520µm)* Failed samples were bunkered:

•from Long Beach, USA • from Augusta, Sicily • from Rostock, Germany • from Taranto, Italy •from St Croix, Virgin Islands

The highest failed sample (>520µm) had a viscosity of 3.3cSt

SUMMARY OF RESULTS

*All failed samples responded well to application of Lubricity Improver.

LS MDO/MGO Lubricity solutions

200

250

300

350

400

450

500

550

600

0 50 100 150 200 250

500ppm Sulphur 350ppm Sulphur

50ppm Sulphur 10ppm Sulphur

Lubricity additive performance / HFRR

Lubricity improving additives are a reliable way to restore lost fuel lubricity

Lubricity Additive

Upper Specimen

Lower Specimen

LS MDO/MGO Viscosity problems & solutions

Viscosity at fuel pumps must be above 2.0cSt (@ 40°C). Lower than above Viscosity can create operational problem such as : -Difficulty in engine starting up -Can lead to excessive leak off causing high and low load operation problems -Can cause high end performance loss -Solution: Is only fuel blending or fuel chillers

Source: Viswa Lab

LS MDO/MGO being supplied under 2cst is statistically very rare 2165 samples have average viscosity of 3.32 cst

Typical Chiller system

Summary on lubricity 2015

• Middle distillate fuel consumption from Jan 15 will be significantly

increased which proportionally increases the risk for poor lubricity. • Lubricity of a fuel is dictated by the hydroprocessing severety in the

refinery to reduce sulphur content. • No direct correlation between lubricity and Sulphur or viscosity. Only

way to know lubricity is by HFRR. • If lubricity is poor a lubricity improver is an attractive reliable cost

effective solution.

Other LS MGO/MDO challenges 2015:

Increased storage intervals of LS MGO/MDO will challenge the fuels stability

• Middle Distillate Instability

Three external factors can influence stability

These are

– Light (UV Stability)

– Air (Oxidation Stability)

– Temperature (Thermal Stability)

– Storage time

Instability of MGO will lead to sludge/gum formations, filter plugging, and increased risk of MGO/HFO compatibility

Biofuel blends of MGO?

• Next revision of ISO8217 will include Biofuel Grades for distillate Fuels

• These will contain a maximum limit of FAME at 7% (as per EN590 automotive diesel)

• This could further negatively impact:

– Price

– Stability

– Cold flow properties

– Resistance to microbial activity

Certified middle distillate fuel additive solutions provide:

Left: Unaged base fuel Middle: Aged base fuel Right: Aged fuel containing Innospec FOA Additive

• Oxidation Stability according to ISO12205 • Thermal Stability according to ASTM D6468 • Injector Fouling according to CEC F-23-01 Peugeot XUD9 • Steel Corrosion according to ASTM D665A&B • Fuel Lubricity according to HFRR ISO12156 • Filter Blocking Tendency according to IP387

Increased MGO/MDO fuel storage requirements will increase risk for aging problems !

0

1

2

3 Basefuel

Basefuel + LI5 Plus

0

5

10

15

20

25

30

Tota

l In

solu

ble

s,

g/m

3

Basefuel

Basefuel + Additive

Total Insolubles reduced by 82 %

EN ISO 12205 and DMA

Lubricating Oil Selection during change over between HFO 3,5%S and middle distillate MGO 0,1% S

• In general Low TBN cylinder oils should be chosen for low sulphur fuels, and high TBN oils for high sulphur fuels.

• The tolerance period for which the engine can be run on low sulphur fuel and high TBN cylinder oil is very dependent on engine cylinder oil feed rate and the difference between two sulphur contents of used fuels.

• Post January 2015 change over procedure will result in a + 36 % higher sulphur difference

• Evaluate the engine’s actual cylinder condition after the first operating period on low sulphur fuel, and act accordingly. If excessive piston crown deposits are seen to be forming, operate at low lubricating oil feed rate or change to a low BN cylinder oil.

• In all cases the engine manufacturer’s recommendations need to be followed.

The current change over practice is between 3,5% and 1 % Sulphur HFO fuels (2,5% Sulphur difference) Post January 2015 the change over will be between 3,5% S HFO and 0,1% MGO (3,4% Sulphur difference)

Our Fuel Specialties business

MARINE HEATING REFINERY PERFORMANCE POWER FBC

Thank you for your time & attention !